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6/18/11

....this post right here, because it fits well with this great George Carlin rant that a friend sent over to me last night.

Here's an except from the Jesse piece. Read it then watch Carlin, because they say the same thing. The styles are somewhat different though.

"The effective tax rates of the super wealthy are less than 15 percent, because they draw a major portion of their annual increase in wealth from capital gains and dividends, and unrecognized entitlements. as well as a wide menu of tax avoiding schemes.

"And while they moan about the nominal headline tax rates, paid only by the 'little people' even if they do not know they are little, corporations and the truly wealthy have not enjoyed just low effective tax rates in the post WW II era. And yet it is still not enough.

"In light of the severe unemployment problems plaguing a large portion of families, austerity seems like a cruel joke, a coup de grâce delivered by the bankers to the income producing classes who depend on labor in the creation and delivery of real products, and not artificial arbitrage and gaming the system.

"But on the other hand, stimulus seems just another excuse for the special interests to put on the feedbag once again to the detriment of the many of the next generation. There is no comparison between the Obama Administration and the New Deal in terms of real change and productive innovation.

"There has been a very strong recovery in corporate profits in the non-financial sector, and the financiers barely missed a beat in distributing a healthy chunk of GDP to themselves in bonuses, while the ashes of the financial crises which they caused still glowing. And their behaviour in the mortgage and derivatives markets has been despicable. I am appalled that people put up with this sort of thing, much less defend it out of some mistaken belief in neoliberal 'free markets.'"

The best new sounds out of LatAm right now come from Calle 13 and this song from a couple of years ago features the outright masterful Panamanian salsero Ruben Blades, a singer who's about 14 cuts above the rest of his genre....prohibido olvidar, baby.

According to the filingsthat the rabid GORO faithful either never read or ignore, Between May 11th and May 19th, he sold 65,701 of his shares. If we assume he got an average of U$28 for each one (some he sold in the 27s, some in the 28s) he'd have raised U$1.84m from the sales.

Oh, and by the way, company President Jason Reid sold 24k of his shares worth around U$700k on May 18th and 19th, too. Same kind of prices, same excellent luck at market. Cue owly:

Let's take for example its latest quarterly, filed 19th April for the period ending Feb 28th 2011. We note that POTG.pk has 637 million shares out, assets of U$533 (yeah, that's five hundred and thirty-three dollars) and liabilities of U$129k, to boot. There are manifold red flags in the Reg Fs for anyone that takes a look...so go look and avoid this scam being run by a scumbag named Paul Luna Belfiore who learned how to scam the market sheep by working at the disgusting Ecometals (EC.v) and its merry band of scamsters and shitbags, then known as Goldmarca, a few years back. Belfiore recently took contol of 480m of those outstanding shares, around 75% of the caboodle. Smacks as normal biz practice for an upstanding junior?

To give you an idea of the current atmosphere for junior mining companies and how much their news releases affect their share prices, here's one from Reuters this morning:

New York, June 17 (Reuters) UPDATE 4 - Junior exploration mining company Wonderful Resources Inc (WON.to) today announced it had discovered the lost city of El Dorado in the middle of the Brazilian Amazon rain forest. Wonderful Resources' CEO George Bloggs remarked in the company press release that bullion gold and jewelry found in an initial reconnaissance of the location is estimated at 56 metric tonnes of pure gold.

6/15/11

Part of today's fun that carries on tomorrow. As for an outside shot, here's a clue for non-subbers (as those who read IKN110 know where I am already).

There's been a lot to like so far, so expect news on positive developments this Sunday. I'm also impressed with the 21st century and its ability to give this humble scribe a decently fast interwebnetpipes connection at 14,760 feet above sea level.

Posting will be light-to-zero today Wednesday and tomorrow Thursday, as your humble scribe is doing things that involve going places on a tight time frame and a lack of interwebnetpipes. Normal service will resume Thursday evening...probably....if I feel like it....if not Friday. Until then, kick back with Jack.

"What is that feeling when you're driving away from people and they recede on the plain till you see their specks dispersing? - it's the too-huge world vaulting us, and it's good-bye. But we lean forward to the next crazy venture beneath the skies."

6/14/11

It does seem like good value compared to specific market peer tickers.

What might put you off buying PAAS is the belief that the silver market is currently going up shit creek without a paddle, but if you believe that you're probably a technical analyst and it's beyond the ability of this humble corner of cyberspace to help you. So overall it's probably a pity your author won't ever buy the stock, what with its cruddy record on environment, health & safety and social issues in Peru. Money isn't everything, y'see. DYODD

Reader 'PB' today alerts this humble scribe to a report that he found over at the quality blog Jesse's Cafe Américain". Entitled "In Gold We Trust" and published today June 14th by Standard Chartered, there's lots for those into juniors and gold to get their collective teeth into. Here are the front page bullet points to get you started:

Slow production growth: Most market commentary on gold centres on the direction of US dollar movements or inflation/deflation issues – we go beyond this to examine future mine supply, which we regard as an equally important driver. In our study of 375 global gold mines and projects, we note that after 10 years of a bull market, the gold mining industry has done little to bring on new supply. Our base-case scenario puts gold production growth at only 3.6% CAGR over the next five years.

High cost hurdle: Our IRR analysis of the major gold projects under construction globally reveals that the long-term gold price will need to be US$1,400/oz to justify capital cost. For greenfield projects, the gold price would need to be closer to US$2,000/oz to generate the minimum required return. Escalating costs of building gold mines could result in delays at many projects.

Deficit market: The limited new supply comes at a time when central banks have turned from being net sellers to significant net buyers of gold. The result, in our view, will be a gold market in deficit, even assuming flat growth in demand. With the supply-demand balance so out of kilter, we see the gold price potentially going to US$5,000/oz.

Our hunting ground – the juniors: We believe the gold juniors are the best way to play a rising gold price, as they offer good growth at attractive valuations in terms of EV/resource within our universe of 106 gold companies. We think the gold majors, with their low growth, will continue to underperform the juniors, particularly those depending on expensive acquisitions for growth.

Zhaojin Mining our top pick: Among the gold companies we cover, Zhaojin Mining stands out for its superior production growth and low production cost. More importantly, it has built a track record in low-cost expansion through exploration and acquisition. We also like Zijin Mining for its cheap valuation and Philex Mining, which has the potential to create value by spinning off its petroleum business and restarting its Bulawan mine

So we now know why Minera Andes (MAI.to) tanked 10% yesterday Monday, as word must have leaked out to the inside trading scumballs in Canada about Rob McEwen's latest brainwave. Here's how today's NR kicks off, click through for more:

TORONTO, ONTARIO--(Marketwire - 06/14/11) - US Gold Corporation (NYSE:UXG - News)(TSX:UXG - News) and Minera Andes Inc. (TSX:MAI - News)(OTC.BB:MNEAF - News) announce that Rob McEwen, Chairman, CEO, and largest shareholder of both companies has proposed to combine these companies to create a high growth, low-cost, mid-tier silver producer focused in the Americas. Mr. McEwen's investment in the combined company (market close on June 13, 2011) would be approximately US$ 345 million. CONTINUES HERE

And the cherry on the cake? If (when) this deal goes through, the newly fused company gets to be called "McEwen Mining Inc", which caused me to wipe coffee off my nice new computer screen this morning.

If I were a long time supporter and holder of MAI.to I'd be hopping mad today. Because of McEwen's desire to "do something" and "take initiative" and "be innovative", MAI.to holders are faced with the future of seeing their valuable producing asset at San José, very good looking prospects around the area and the spin-out bonus of Los Azules be diluted to kingdom come by the pisspoor track record of gold exploration at US Gold (UXG), which to date has only found one decent silver prospect (the gold assets currently at UXG ain't never gonna happen) at El Gallo Mexico (i.e. for "US Gold" please read "Mexico Silver") that's already valued up to the hilt. Sadly for MAI.to longs, it's going to be very difficult to stop McEwen from applying the KY Jelly because as he owns 31% of shares and will be able to mesmerize enough of his faithful flock into believing this deal is good for them and not just his own ego the majority vote will be easy for him to reach.

0.4 shares of UXG is an insult! ForCryinOutLoud, HOC.L could offer a better deal than this. In fact, thinking about it, that might just happen....

Market Vectors® Junior Gold Miners Index (MVGDXJ)The quarterly review produced 23 additions (18 Canadian stocks) and 4 deletions (all Canadian) from the index.The changes of the index components will beimplemented after the close of trading on Friday, June 17th, 2011 and will be effective the next trading day.

Adds

Est Demand / Supply

FVI CT Equity

FORTUNA SILVER MINES INC

4,260,779

BCM CV Equity

BEAR CREEK MINING CORP

2,612,782

MAG CT Equity

MAG SILVER CORP

1,532,146

OK CV Equity

ORKO SILVER CORP

4,391,395

GPR CT Equity

GREAT PANTHER SILVER LTD

4,467,599

ECU CT Equity

ECU SILVER MINING INC

10,657,909

AUMN UA Equity

GOLDEN MINERALS CO

407,051

AVR CT Equity

AVION GOLD CORP

13,222,891

TXG CT Equity

TOREX GOLD RESOURCES INC

11,968,748

TRR CV Equity

TRELAWNEY MINING AND EXPLORA

3,874,626

AR CT Equity

ARGONAUT GOLD INC

2,960,120

ATC CV Equity

ATAC RESOURCES LTD

2,528,876

SUE CT Equity

SULLIDEN GOLD CORP LTD

6,732,300

ORE CT Equity

OREZONE GOLD CORP

2,527,123

PZG UA Equity

PARAMOUNT GOLD AND SILVER

3,146,107

EDV CT Equity

ENDEAVOUR MINING CORP

4,002,054

BRD CT Equity

BRIGUS GOLD CORP

5,815,474

P CT Equity

PRIMERO MINING CORP

1,937,853

Dels

ANV US Equity

ALLIED NEVADA GOLD CORP

2,849,000

DGC CN Equity

DETOUR GOLD CORP

2,226,000

ASR CN Equity

ALACER GOLD CORP

9,581,950

EGU CN Equity

EUROPEAN GOLDFIELDS LTD

4,778,200

I was sent this info by several readers (i thank them all) as to why many of the stocks on the list were rallying while the rest of the sector found itself in the doghouse. It makes sense in yesterday's rallies of many issues, from the good silver stocks all the way down to the crud included, like ECU Silver (ECU.to). As well as that table, here's an example mail from reader "T", received this morning (permission to reproduce granted) and I agree with every point he made, fwiw:

Otto, I think the Bear creek rally yesterday was mostly, or at least partially due to their inclusion in the GDXJ, the junior gold ETF. As well as FVI, MAG, GPR, ATC, ECU and roughly 20 others. Look at the action in those vs the peers yesterday. Removed from the index were DGC, EGU, ANV, and Alacer. The index has an enormous effect on small companies. I think its about $2 billion in assets now, so a typical 0.5-1% position is $10-20 million. As an example, that's 2-4 million shares of BCM. Nuts. Funds obviously front run the ETF as you can see, which only makes me wonder why the changes are announced prior to the GDXJ purchases. I guess by law an ETF must disclose the changes so that a potential buyer knows what he is buying. It certainly sets up for some funny business.

6/13/11

Reuters dude Andy Home is a must-read on copper and today he adds several degrees of intelligence to the current debate on China demand levels. Get the note here, meanwhile below one of the charts lifted from the note.

Bear Creek Mining (BCM.v) has been nastily beaten up these last few weeks but is enjoying a decent relief rally bounce this morning, probably due to the roadblock being lifted in the Carabaya region (where its world-class Corani project is located) yesterday evening (read moreabout that here).

The protests in Carabaya aren't really about mining and more about the plans to build a big hydro power station in the Inambari area of that region, a massive power plant that would drown a sensitive ecosystem's worth of valley. So this morning we have news on that aspect too and that's where the potential for a rally in Vena Resources (VEM.to) comes into play. Peru's national daily La Republica reports plans to scrap the Inambari power station and replace it with a nuclear power plant instead. Guess where the U would come from for that project, folks? Yup, just down the road (literally) at Macusani, the place where Cameco and Vena have their JV exploration program, already have a multi-million Lbs U resource under 43-101 compliance and look like adding substantially to said resource later this year when the new and good looking drill results are factored in.

DYODD, cos I'm long VEM.to (but more for its Azulcocha zinc mine, less for this U that's suddenly looking like a decent asset adding bonus prize again)

The World Bank representative in Bolivia, Óscar Avalle, said yesterday that Bolivia is about to graduate from a “concessional” country to join the ranks of countries like Brazil and Argentina. Avalle explained that this “graduation” was provoked by a prudent macroeconomic policy begininning in 2006 and that Bolivia may transition from a poor country to a middle income country in the next two years. During these years Bolivia has averaged a 4% growth rate despite the global recession. Avalle reminded listeners that the World Bank forgave $1.5 billion of Bolivia’s national debt in 2006 and then began loans again in 2008 which now reach $257 million dollars. Avalle said that World Bank disbursement rates have risen from 9% to 22% which brings Bolivia on par with other countries.

It must be really frustrating for the rabid Evo opposition in Bolivia to see the country progressing so well under a Commie Pinko, no?

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